What was Netflix thinking? They just proved that even a wildly successful industry leader can mess up their business when they push their customers in ways they don’t want to go. I am referring to Netflix’s doubling of the monthly fee if members wanted to keep the options they enjoyed. Netflix knew they would lose customers and had prepared its investors for some attrition. However, by September, a million more subscribers than they predicted have quit. The company’s stock price fell 14 percent.I’m guessing that many of you did what I did – I stewed about it for over a month. However, when the deadline loomed immediate, I said the heck with them and cancelled.

The majority of members who voted with their feet, didn’t want to be forced to chose one option over the other. If we had to chose, our rational brain would have said that our out-of-pocket would have been the same, and frankly, we are not talking a lot of money. Many of us were already using one part of their service more than the other part. If we had wanted both options, the new fee was still less than two tickets to a local cinema or using today’s standard conversion — four lattes. So it wasn’t really about the expense for most of us. It was about the way we felt they treated us!How does this relate to your wine club? Well, there are times when change to your club structure becomes necessary. Most of us formed our clubs thinking in the present tense. Then after a few years, we more fully realize the impact of production changes (either growth or reduction) or the amount of resources (staff, technology, wines, etc.) needed to sustain a robust club.At some point, we may want to increase shipments or number of bottles in each release, cut back on perks or maybe ask members to pay for something that used to be complimentary.How to accomplish this without a mass exodus is worth spending some time analyzing what Netflix did wrong and what you must do right.Recently, I helped a winery client increase their club revenue by making well-thought out changes to their club structure. We accomplished these changes in stages and by carefully explaining the changes. We rewarded members for their loyalty when they accepted the changes. The result ? Only two members quit during the phase-in period.Should you decide to make changes to your wine club, take time to avoid the Netflix debacle.And if I can help guide your team through the process, please contact me at michele@winedirectsolutions.com

Update 03/22/2015I received a few comments long after I wrote this blog piece that took me to task for scolding Netflix's strategy. And yes, Netflix not only regained share price - it exploded to its current price $438.30 and is still a Motley Fool recommended buy. However, they drastically changed their business model to become yet again, the industry innovator by moving to producing original content- a key move to compete in the future as we attempt to pull the cable cord.

I agree that in hindsight that Netflix's move was sound as they moved their subscribers from receiving DVDs to streaming. However, my argument is still that they had little regard for their membership, who voted with their feet and walked and only came back when they offered something new, highly desired that could not be purchased elsewhere.

Very few wineries and/or wine clubs can completely change their business model and retain customers and goodwill without a great deal of effort and good communication.